In 1998 Netflix pioneered the process of renting DVD’s online and has been the undisputed market leader ever since. Netflix offers movie rentals by mail through a number of monthly subscription plans.

The most popular plan (currently $17.99 per month) lets customers rent an “unlimited” number of DVD’s, 3 out at a time. “Unlimited” is realistically limited by the shipping times between your home and one of their 40+ distribution centers. Netflix claims that 90% of their customers receive the DVD’s within one business day.

How does Netflix work?Once you sign up with Netflix, you can login and start filling your “queue” with movies. The queue is similar to a shopping cart – Netflix mails you movies from your queue depending on availability. Each movie has ratings and user reviews which makes it easier for you to decide what you want to rent. Some people fill their queues with a dozen movies, others have hundreds of titles in their list.

Netflix ships the first 3 DVD’s within a day or two after you sign up. Once you are finished watching the movies, you can mail them back (in no particular order) in their original DVD sleeves (shipping is free both ways). Once Netflix receives a DVD, they send an e-mail confirmation and ship you another title from your queue. There are no late fees or due dates. You are free to keep the movies as long as your membership is active.

Why do people love Netflix?

Netflix has historically had more indie, anime, foreign, and other specialty titles than its competitors. In contrast, Blockbuster focused more on mainstream movies. Recently, Blockbuster has also added many specialty titles to its inventory, but Netflix still holds an advantage in having a wider selection of non-mainstream films.

Netflix has a pretty passionate fan base and has built a huge repository of fan reviews and ratings. They also have some features, such as sharing movie lists with friends, that give the site a better sense of community.

The service streams movies at near DVD quality resolution and allows you to skip, fast forward, and rewind any title that is available through this service. The selection is limited according to the licensing deals that Netflix has with certain studios, so you are likely to find more indie and older films rather than new releases or blockbusters. However, since its launch Netflix has been adding more and more titles to this service, so expect the selection to keep growing.

For Watch Now, you are allocated a number of hours equal to your monthly subscription plan. For example, if you have the $17.99 unlimited plan, you are able to watch 18 hours or movies through the service. Only your actual “watching time” is counted, so if you skip past any part of a movie, you are not charged for it.

The Watch Now service has been well received by its users and has proven to be a popular feature that Blockbuster and others cannot match. The only limitation is that many people do not yet have internet-enabled entertainment centers or do not watch movies on their computer. We suspect this will change in the coming years.